Rise in jobless rate bucks recovery trend

THE unemployment rate edged up to 1.2 per cent of the workforce in the third quarter, bucking a trend of an uptick in broad economic indicators showing momentum in the economy.

The latest figure, released yesterday by the National Economic and Social Development Board (NESDB), contrasts with the 0.9 per cent jobless rate posted in the third quarter of last year, said Porametee Vimolsiri, secretary general of the state think tank.

The overall ranks of workers fell 1.6 per cent to 37.6 million, down from 38.3 million in the same period of last year, according to the Thailand Social Development report for the third quarter, released yesterday.

The farm sector faced drought from July to August, causing severe damage to crops, fishery stocks and livestock holdings in many provinces nationwide. This resulted in a 1.2 per cent decline in employment in this sector, said the NESDB.

A 1.8 per cent decline in employment in the non-agricultural sector was caused by two main factors, the agency said.

Firms employed advanced technology in both production and business processes. Second, a large part of the gains in exports this year have been in capital-intensive industries, such as electronics, automobiles and chemical product industries.

In contrast, labour-intensive industries, such as for textiles and clothing, managed only slow export growth and some of these products for overseas shipments had been sourced from inventories.

“The manufacturing sector was still using their old production facilities and did not employ new workers, even though exporters had boosted shipments in the third quarter,” Porametee said. “Employment will increase next year should the economy continue to expand at a high rate similar to this year.”

The report found that new graduates had to spend more time looking for work. Among the 453,000 who are unemployed, 43.4 per cent were fresh graduates from universities, with 85 per cent of them taking longer than six months to find a job.

There was also a mismatch between the market demand for workers and the qualifications of these job seekers, said Porametee.

Of those who have worked previously, 65 per cent had only attained secondary school qualifications or lower, and they had been seeking employment for longer than three months.

The latter group had a higher risk of long-term unemployment compared with other groups, since their low-skilled jobs could more readily be taken up by machines.

The value of real wages increased by just 0.1 per cent, with a 2 per cent gain in the agricultural sector. However, labour productivity increased by an impressive 6 per cent, the NESDB said.

The economy expanded 4.3 per cent in the third quarter, higher than the market expectations but still slow in comparison with the rates of well over 5 per cent growth enjoyed in other Asean countries.